Lucifer's Banker Read online

  PRAISE FOR

  BRADLEY C. BIRKENFELD

  “Bradley Birkenfeld—a name you will never forget.”

  —New Haven Register

  “The most significant financial whistle-blower of all time.”

  —CNBC

  “Simply put, Birkenfeld must be considered among the biggest whistle-blowers of all time.”

  —Tax Notes

  “If a single person can be credited with drawing popular attention to the offshore world, it may be Bradley Birkenfeld.”

  —Financial Times

  “In 2007, the veil of secrecy was shattered by a whistle-blower named Bradley Birkenfeld.”

  —The Washington Post

  “UBS whistle-blower Bradley Birkenfeld deserves a statue on Wall Street, not a prison sentence.”

  —New York Daily News

  “I will say that without Mr. Birkenfeld walking in the door of the Department of Justice in the summer of 2007, I doubt as of today this massive fraud scheme would have ever been discovered by the United States government.”

  —Department of Justice Prosecutor

  “So does Mr. Birkenfeld deserve the award of $104 million … ? Every penny!”

  —Internal Revenue Service Agent

  WWW.LUCIFERSBANKER.COM

  This is a work of nonfiction. While the stories in this book are true, some names and identifying details have been changed.

  Published by Greenleaf Book Group Press

  Austin, Texas

  www.gbgpress.com

  Copyright ©2016 Bradley C. Birkenfeld

  All rights reserved.

  No part of this book may be reproduced, stored in a retrieval system, or transmitted by any means, electronic, mechanical, photocopying, recording, or otherwise, without written permission from the copyright holder.

  Distributed by Greenleaf Book Group

  For ordering information or special discounts for bulk purchases, please contact Greenleaf Book Group at PO Box 91869, Austin, TX 78709, 512.891.6100.

  Design and composition by Greenleaf Book Group and Sheila Parr

  Cover design by Bradley C. Birkenfeld and Greenleaf Book Group

  Cataloging-in-Publication data is available.

  Print ISBN: 978-1-62634-371-9

  eBook ISBN: 978-1-62634-372-6

  Part of the Tree Neutral® program, which offsets the number of trees consumed in the production and printing of this book by taking proactive steps, such as planting trees in direct proportion to the number of trees used: www.treeneutral.com

  Printed in the United States of America on acid-free paper

  16 17 18 19 20 21 10 9 8 7 6 5 4 3 2 1

  First Edition

  For my brother Doug, who has been with me from the first day I started on this roller-coaster ride. A loyal friend and brilliant lawyer, he witnessed the corruption, understood what was going on, and advised me along the way.

  “An event has happened, upon which it is difficult

  to speak, and impossible to be silent.”

  —EDMUND BURKE, IRISH PHILOSOPHER

  CONTENTS

  PROLOGUE: Fall Guy

  CHAPTER I: Making the Cut

  CHAPTER II: Boston Massacre

  CHAPTER III: Cracking the Code

  CHAPTER IV: Sports Cars and Models and Yachts, Oh My!

  CHAPTER V: Burned in Bern

  CHAPTER VI: Counterpunch

  CHAPTER VII: Tarantula

  CHAPTER VIII: The Mexico Setup

  CHAPTER IX: Tightrope

  CHAPTER X: Hunted

  CHAPTER XI: The Twilight Zone

  CHAPTER XII: Blowup

  CHAPTER XIII: Scapegoat

  CHAPTER XIV: Camp Cupcake

  CHAPTER XV: Rich Man, Poor Man

  ACKNOWLEDGMENTS

  APPENDIX

  PHOTOGRAPHS

  READING GROUP GUIDE

  AUTHOR Q&A

  ABOUT THE AUTHOR

  PROLOGUE

  FALL GUY

  “I fear that foreign bankers with their craftiness and

  tortuous tricks will entirely control the exuberant riches of

  America and use it to systematically corrupt civilization.”

  —OTTO VON BISMARCK,

  GERMAN CHANCELLOR

  January 8, 2010

  Minersville, Pennsylvania

  ALL ROADS THAT LEAD to federal prisons are long.

  There are no exits, no shortcuts to quicken the journey and dull the pain of anticipation. All such roads are built upon decisions, with hairpin turns and lost highways. That final leg might involve a quick mile’s ride from a courthouse, or a six-hour trip aboard a fume-choked prison bus, but it’s always the payoff of a life gone crazy, and it always ends the same way.

  For me, the road to Schuylkill Federal Correctional Institution seemed fucking endless on that freezing Friday morning. It was only an hour’s drive from my hotel in Scranton, Pennsylvania, to the prison in some backwater town, but it felt like a year. Inside the Lexus I could see my breath, and outside the snow fell in wind-whipped veils, making the blacktop slick and risky. I’d wanted to take the wheel myself, one last spin before they locked me up, but I’d been slapped with a curfew, branded with an ankle monitor, and didn’t have a car anymore. So my older brother Doug, who’s almost six-foot-four like me, drove through the storm. I made a few last phone calls to friends from the car, but mostly we sat there in tight-lipped silence, heading for an appointment that neither of us wanted to keep.

  I knew this was going to be hard on Doug, maybe even more than on me. He was damn proud of me for what I’d done, blowing the top off the biggest banking and tax fraud conspiracy in history, and he was furious with the Department of Justice. Doug thought I deserved the Medal of Freedom instead of a pair of leg irons. I tried telling him it would be all right.

  “Hey, dude, chill out,” I said as I looked at his white-knuckled fingers gripping the wheel. “I can do three years in the slammer standing on my head.”

  But Doug wasn’t buying it. He was outraged, bitter, and vengeful. And since there’s no point in pretending otherwise, I was too.

  I gave up on my phony bravado as the car entered a long curve through a forest of snow-slathered pines. The wheels suddenly lost traction and the car started to drift, but Doug handled the skid like a Formula One driver and he didn’t slow down. He was hunched over the wheel, staring through the windshield where the wipers were on full and slapping at the snow. They sounded to me like a metronome, attached to a time bomb. Maybe that’s a little dramatic, but they did.

  “Take it easy, brother.” I reached over and gripped his shoulder. “I’m in no rush.”

  Doug finally smiled, but it was more like a death’s-head grin, and we both turned inward again.

  I’ve heard that when you’re about to die a violent death, your whole life flashes before your eyes. Luckily I’ve never experienced that, but I can say firsthand that when you’re about to be locked up in prison, a similar phenomenon occurs. Yet my looking back felt more like some terminal disease, during which I had plenty of time to go over every joy and sorrow, plus all the perfect moves I’d made and a couple of dumbass screwups. My life didn’t flash before my eyes; it unwound slowly like an old film on a rickety movie projector.

  I had no regrets and I’m not a fan of pity parties. But there were things I sure as hell would’ve changed. For instance, I would never have trusted my Swiss bank bosses to have my back, when I knew deep down that traits like integrity were not in their bones. And I would definitely not have gone to the US Department of Justice, expecting them to protect me while I handed them, on a silver platter, the biggest tax fraud scheme in history. Even at the ripe old age of forty-four, I still had faith in the America
n justice system. Well, you live and learn.

  What really occupied my mind as we drove were the things I’d miss: the lifestyle I’d worked my butt off to achieve, my parents and brothers, my friends, and my liberty. I knew that an hour from now I’d be faced with some very stark contrasts: the Disneyland of my life before today, and the Tower of London after.

  I leaned back and closed my eyes, recalling my roller-coaster ride. Just two years ago I’d been living the kind of existence most men can only dream about, and the sights and smells and sensations of it all washed over me again like a warm Caribbean wave.

  And there I was, back in Geneva, Switzerland, lounging on the veranda of my luxury third-floor flat overlooking Cours de Rive. Steam curled from a fine china cup of espresso and the orange pages of the Financial Times fluttered in the morning breeze. A mound of fresh strawberries from the farmers’ market across the street glistened on my marble table, and the Swiss trams below were rolling back and forth like a Christmas morning train set. On Saturdays my lively Eaux-Vives neighborhood was quiet, the cabarets shuttered at dawn, and I could hear the clops of horseshoes on cobblestones from a tourist carriage in the distance. Sunlight glinted off the snow-capped Swiss Alps and Diana Krall jazz wafted through my tall French windows.

  My exotic Brazilian girlfriend, Thais, was still inside, relaxing on a pile of Persian pillows. We were both hungover yet happily sated. I could still feel her skin, soft as Nepalese silk, and I could hear that provocative Portuguese accent calling out something that made me grin.

  “Bradleeee, come back into bed, darling. And bring that thing I love with you.”

  It was one of those glorious weekends again, when we’d hop in my fire-red Ferrari 550 Maranello and take the drive to Zermatt, roaring through magnificent mountain passes, sunglasses glinting above our grins. My Swiss chalet was perched at the top of the picturesque town, where cars were forbidden, so we’d park at a small village near the base of the mountain range and take the cogwheel train up a long, steep valley to the summit. And finally after one last climb we’d arrive, standing breathless and thrilled before my picture-window view of the Matterhorn.

  Maybe it wasn’t so special, unless you’re partial to magnums of Laurent-Perrier champagne, fresh beluga caviar, or boxes of Churchill cigars just flown in from Havana. I guess it was nice if you like Frigor Swiss chocolates, Audemars Piguet watches, Brioni suits, and gorgeous girls who care only about pleasing you and having a great time. But just imagine all that, and then—the best thing about it—it had all been paid for in cash.

  After all, it was all about the money, right? That’s why I’d gone into international banking, gotten a master’s degree at the university in La Tour-de-Peilz, and put my nose to the grindstone in Geneva. That’s why I was recruited for a coveted job at the Union Bank of Switzerland, UBS, the biggest and the best bank in the world. And once there, as the only American on an elite team of Swiss private bankers, I’d perfected my game, flying first-class all over the world, staying in five-star resort hotels, and seducing scores of One-Percenters into stashing their fortunes in secret Swiss numbered accounts, no questions asked. Armed with a big pair of cojones, financial smarts, and plenty of charm, I’d made millions of dollars for UBS, as well as for my clients, with a nice fat cut for myself.

  But now, as I thought it over, I knew it hadn’t been about the money at all. I’d lived the life of an Ian Fleming character, which was all about the thrill, and that’s a hunger that can get you buried. I might have kept at it, except it turned out I had this annoying itch called a conscience, and I’d finally discovered that “The Firm” had no such thing at all. Those devious bastards at UBS, my nefarious Swiss bosses, had known all along that everything we were doing was in flagrant defiance of American tax laws and I could wind up in prison till my goatee turned white. They were setting me up for a fall, along with my clients and colleagues, so I’d checkmated the Swiss Mafiosi and jumped first.

  Problem was, I’d landed in the wrong lap. The US Department of Justice was supposed to welcome me, protect me, thank me for being the first and only Swiss private banker to crack that impenetrable shell of Swiss secrecy and corruption, to ensure that American taxpayers would be cheated no more. But instead, the DOJ had reached out for my treasure trove with one slimy hand, and slapped cuffs on me with the other.

  Scumbags. And that’s being polite.

  I opened my eyes as the fury of it all welled up again from my guts, but then the scenery outside snapped me out of myself. You’re not the only disgraced samurai around, Birkenfeld. I was looking at coal country in middle America, with its run-down houses and farms, smoke curling from cracked chimneys, and rusty old cars perched on cinder blocks. I saw horses, the only mode of transport left when you can’t afford overpriced gas, standing on snow-swept hills and nosing for scraps of green. I knew this had once been a place of American heroes, men who labored deep in the earth for that black stone their countrymen craved. Many had died in collapsing mines, and many more still would die from collapsing lungs. And now they were pariahs, cursed by the environmentalists, shunned by the politicians who’d sucked up their votes and tossed them away. Betrayed by their country, just like me. Except they’d never see a ski chalet in Zermatt.

  We passed a road sign: “Minersville.” Time to get my game face on. In short order, my ass would belong to the US government, payback for spilling the beans. Thanks a lot, Uncle Sam.

  But I had a surprise for the federal goons; all that Swiss glitz didn’t mean that much to me. I’d grown up without it and could live just fine under the harshest conditions. After all, I’d made it through Norwich University in Vermont, one of the oldest and toughest private military academies in the nation, where every day dawned with push-ups in the snow, ten-mile ruck marches, relentless drill sergeants barking orders, hours of mind-bending classes, and then studying like crazy till midnight. I knew nothing like that would be happening at Schuylkill. The Feds couldn’t treat prisoners like ROTC cadets, which was sort of ironic because it might’ve cut down on the recidivism rate.

  Anyhow, I’d already decided that whatever they threw at me, I was going to beat them at their own game. I’d always been an avid fan of that old TV show Hogan’s Heroes, a World War II comedy about a bunch of Allied prisoners turning the tables on their Nazi wardens. So, Schuylkill was going to be my “Stalag 13,” and I was going to be Colonel Hogan. Bring it on, baby.

  I looked over at Doug. He’s a handsome dude, better looking than me or our older brother, Dave, with a full head of auburn hair and white teeth. Doug’s a tough attorney and when his ire’s up, he sticks his big chin out and lasers his target with those cold blue eyes. Right now his jaw was rippling.

  “You’re pissed,” I said.

  “Nah, I love taking my baby brother to prison. Maybe we can get Dave indicted on something so I can drive him too.”

  I laughed at that. The minute you can’t laugh anymore, you’re finished.

  “Relax, dude,” I said. “This’ll all go by in a flash, you’ll see.”

  “I feel like I want to kill somebody,” he seethed. “Somebody like Kevin Downing.”

  I sure as hell agreed with Doug’s urge. Kevin Downing was a senior prosecutor at the Tax Division of the Department of Justice, the one to whom I’d first brought my case. I’d handed him the keys to the kingdom, all the secrets of illicit Swiss banking, and he’d turned on me like a rabid dog. Doug, an attorney with impeccable ethics, viewed Kevin Downing as the profession’s lowest life-form: petty, hypocritical, self-serving, and basically a spiteful prick.

  “Anyone else on your list?” I asked.

  “After Downing? Yeah, Olenicoff.”

  Ah, yes, Igor Olenicoff. Just the mention of his name made my blood boil too. Olenicoff was a Russian-born California real estate mogul, a multibillionaire, and he’d been my biggest client at UBS. We’d met at one of those yacht marinas where every boat costs as much as a mansion, the crews all look like Abercrombie & Fitch p
oster boys, and the yacht owners’ mistresses flash their silicone boobs and diamond bracelets right in front of the wives. I’d met with Olenicoff again after that and had introduced him to my colleague in Liechtenstein, Mario Staggl, a wizard at making money and identities disappear.

  Olenicoff was big money, and he wanted a large chunk of it stashed away for a rainy day from the prying eyes of the IRS. So Mario had created two Liechtenstein trusts with three underlying Danish shell companies, with Olenicoff as the ultimate beneficiary. Soon after that I had $200 million of his US real estate profits sitting in several UBS Swiss numbered accounts. The only thing identifying Olenicoff as the true account holder was an index card with his name on it, and his code name. That card was locked in a safe at our Geneva headquarters, and the only ones who could access it were me and my boss, Christian Bovay. No one else at UBS knew Olenicoff’s identity.

  Technically, nothing about this arrangement was illegal, unless Olenicoff “forgot” to declare his Swiss stash of cash on his US tax returns. I had plenty of wealthy American clients at UBS, and whether or not they filled out a W-9 was none of my business. But don’t get me wrong. I wasn’t a choirboy and I knew what I was doing. And UBS kept hounding us “hunters” to bring in more rich folks with cash, so I’d sent my conscience on sabbatical and played the game. It wasn’t until I found out that my bosses were going to hang me out to dry that I took preemptive action and turned them in.

  Then the US Department of Justice made me a deal I couldn’t refuse. “Give us the names of your American account holders, Birkenfeld. All the names, or we’re going to prosecute you, too.” Didn’t leave me much choice. If you’re going to blow the whistle, you don’t get to select who you’d like to protect.

  At the time, Igor Olenicoff was the typical arrogant billionaire while being cheap as hell; I didn’t feel bad about ratting him out because I figured he’d hire the best lawyers money could buy and wriggle out of it just fine. Igor even confided in me and told me he wished in his next life he could come back as a Newport Beach housewife. To this bizarre statement, I asked him why. He responded, “Because all they do is spend their husbands’ money.” What a great guy!